Symptoms:
VMware Tools upgrade failed, the VM was left with no VMware Tools running. See vminst.log showed:

2021-05-12T03:03:33.268-05:00| tools-build-17901274| E1: Inst_InstallServiceW: Service 'VMTools' could not be created| winerror code 1072 (The specified service has been marked for deletion.)
2021-05-12T03:03:33.268-05:00| tools-build-17901274| E1: Inst_InstallServiceW: Deleting service and re-attempt create
2021-05-12T03:03:33.268-05:00| tools-build-17901274| E1: Inst_InstallServiceW: Service could not be deleted: ERROR_SERVICE_MARKED_FOR_DELETE
2021-05-12T03:03:33.268-05:00| tools-build-17901274| I2: ModifyDependencyString: Dependencies wide char winmgmt
2021-05-12T03:03:33.299-05:00| tools-build-17901274| E1: Inst_InstallServiceW: Service 'VMTools' could not be created since marked for deletion(attempt #2)| winerror code 1072 (The specified service has been marked for deletion.)
2021-05-12T03:03:33.299-05:00| tools-build-17901274| I0: ERROR: VMTools service failed to install. Failing install

Note:

• The timestamps here are from a sample log file.

VMware Tools 11.x

As per the MSDN documentation in https://docs.microsoft.com/en-us/windows/win32/api/winsvc/nf-winsvc-deleteservice

"The database entry is not removed until all open handles to the service have been closed by calls to the CloseServiceHandle function, and the service is not running."

ERROR_SERVICE_MARKED_FOR_DELETE indicates that a handle to the VMTools service is still open in some process given that the service process vmtoolsd.exe has already exited. Due to the old version VMTools service is marked for deletion, the new version VMware Tools installer can't create VMTools service again and tools upgrade fails.

No resolution as of now.

Workaround:

To workaround the issue, please restart the Windows system and restart the VMware Tools install.

Avoid opening the following programs while performing VMware Tools upgrade:

• Sysinternals Process Explorer

• Task Manager

• mmc.exe (most commonly, Services.msc)

Avoid the following product while performing VMware Tools upgrade:

• Quest Change Auditor version 7.2 Build 24022

Customers running the Quest software should report this to Quest and check if a fixed version is available.

For customers using Microsoft SCCM to perform VMware Tools upgrade, we recommend completing Windows Update first, if system reboot is required, reboot the system and then perform VMware Tools upgrade.